Petroleum or crude oil is a thick greenish-brown liquid found in permeable underground rock, and consisting mainly of hydrocarbons and mixed with other elements, especially oxygen, sulphur, and nitrogen. Petroleum is believed to have been formed from the remains of ancient living organisms deposited with rock-forming sediments. These have then been converted by the effects of heat, pressure, and bacterial action, and changed into petroleum. This liquid then migrated through porous rocks and fissures, becoming trapped in large underground reservoirs.

In order to locate and drill for oil, geologists first look for variations of rock density in the type of rocks where oil is known to occur. Exploratory drillings then confirm the presence of oil. Oil wells are made by drilling with a rotating bit supported in a wider shaft. A special mud is then pumped through the hollow bit to collect debris, which is forced back up the shaft around the drilling bit.

Worlwide dependence on oil has led to many attempts to control production levels and prices. The US drilled the first commercial well in Pennsylvania in 1859, and led in production until the 1960s when Middle Eastern reserves led to cheap oil and worldwide dependence. The Organisation of Petroleum Exporting Countries (OPEC) was formed in 1961 to protect member countries from exploitation. OPEC introduced price rises in 1973, and in 1974 the International Energy Agency (IEA) was formed to protect the interests of oil-consuming countries. North Sea oil and the Alaska pipeline have helped stabilise prices since then, but wars in Iran, Iraq, and Kuwait have heightened fears about unstable production levels. World oil reserves and future consumption are both difficult to estimate accurately.

Having just completed a college course on the subject I feel that I should debunk some of the more prominent myths about the oil industry. Let’s take a step back from the biased media and politicians and apply some logic.

Myth 1: We will run out of oil soon

This is partially true. As with any resource, there is a limited quantity. However, it is unlikely that we will ever entirely run out of oil, only economically profitable oil. Canada has the second most proven reserves out of any country. Unfortunately it is stored in “unconventional sources,” such as tar sands and oil shale, which are VERY expensive to refine. The only certainty for the future is higher prices.

The amount of untapped oil is not exactly known for several reasons. First of all, wells are hard to find and once proven to contain oil, we can’t be sure of how much is left. Geologists use seismic readings and their knowledge to divide the amount of oil into proven and unproven reserves, meaning what we know we have and what we think we have. Both of these numbers are often government secrets in Middle Eastern countries (remember that oil is nationalized in Middle East). Given the vast quantities of oil in the region, this adds a large grey area to the number of years of petroleum left.

When discussing the world’s supply, peak oil is almost always mentioned. Developed by M. King Hubbert in the 1950s, the theory essentially states that at oil production is shaped like a bell curve and will eventually reach the top, a point called peak oil. Once peak oil is reached no matter how hard the wells are pumped oil cannot be produced any faster and production will eventually decline. Hubbert became famous when his prediction for US peak oil became true in 1970. Keep in mind that the US produced all of its own oil throughout most of the 20th century and still continues to produce most of it. Now many scientists are looking to predict global peak oil production. Predictions range from sometime in the next two decades all the way until the next century.

Myth 2: Oil companies are entirely responsible for high gas prices

Oil companies seem to be the biggest scapegoat for high prices. The image given to oil companies by politicians and the media could easily lead one to assume that Exxon and Shell have caused gas prices to double in the last decade. Keep in mind that oil is very expensive to produce and supply is going down. The obvious oil wells (those located relatively close to the surface and containing large amounts of oil) have already been discovered. What remains are wells buried deeper with somewhat less oil. Research and exploration for new wells is very expensive and the chances of hitting a well are often a mere 1 in 6. You can certainly disagree with this, but lower gas prices are less of an incentive and provide fewer funds for companies to go out and find new reserves. And don’t blame gas stations/convenience stores for gas prices. Often they make less than $100 dollars a day from selling gas. One person driving off without paying can eat their entire gas profit for the day. Drive-offs cost the industry of $250 million a year.

Myth 3: OPEC is entirely responsible for high gas prices

For those who don’t know, OPEC is the Organization of Petroleum Exporting Countries. They claim that their mission is to “coordinate and unify the petroleum policies of Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.” It is made of five founding members (Iraq, Iran, Saudi Arabia, Kuwait, and Venezuela) and 9 other countries: Indonesia, Ecuador, UAE, Nigeria, Libya, Algeria, Angola, Qatar, and Ecuador. It is estimated that these countries control 50% of the world’s proven reserves. Many consider OPEC to be a cartel that artificially drives up prices, but their effectiveness in controlling prices is disputed. At the moment demand is extremely high and whatever is being produced is being used. Some countries have disobeyed the production quotas which limit the amount of oil that countries can export. Obviously the basic laws of supply and demand apply and lower supply leads to high prices.

OPEC is certainly not America’s friend, but they are not as big a threat as you may think. America is the number one consumer of oil, using 21 million of the approximately 80 million barrels produced a day. Many countries will have plenty of unsold oil if they cut us off. Under difference circumstances in the oil industry OPEC can be very effective. In the early 1970s they boycotted US and it caused an energy crises.

Any one of a great variety of unctuous combustible substances, not miscible with water; as, olive oil, whale oil, rock oil, etc. They are of animal, vegetable, or mineral origin and of varied composition, and they are variously used for food, for solvents, for anointing, lubrication, illumination, etc. By extension, any substance of an oily consistency; as, oil of vitriol.

⇒ The mineral oils are varieties of petroleum. See Petroleum. The vegetable oils are of two classes, essential oils (see under Essential), and natural oils which in general resemble the animal oils and fats. Most of the natural oils and the animal oils and fats consist of ethereal salts of glycerin, with a large number of organic acids, principally stearic, oleic, and palmitic, forming respectively stearin, olein, and palmitin. Stearin and palmitin prevail in the solid oils and fats, and olein in the liquid oils. Mutton tallow, beef tallow, and lard are rich in stearin, human fat and palm oil in palmitin, and sperm and cod-liver oils in olein. In making soaps, the acids leave the glycerin and unite with the soda or potash.

Animal oil, Bone oil, Dipple's oil, etc. Old Chem., a complex oil obtained by the distillation of animal substances, as bones. See Bone oil, under Bone. -- Drying oils, Essential oils. Chem. See under Drying, and Essential. -- Ethereal oil of wine, Heavy oil of wine. Chem. See under Ethereal. -- Fixed oil. Chem. See under Fixed. -- Oil bagZool., a bag, cyst, or gland in animals, containing oil. -- Oil beetleZool., any beetle of the genus Meloe and allied genera. When disturbed they emit from the joints of the legs a yellowish oily liquor. Some species possess vesicating properties, and are used instead of cantharides. -- Oil box, ∨ Oil cellar Mach., a fixed box or reservoir, for lubricating a bearing; esp., the box for oil beneath the journal of a railway-car axle. -- Oil cake. See under Cake. -- Oil cock, a stopcock connected with an oil cup. See Oil cup. -- Oil color. (a) A paint made by grinding a coloring substance in oil. (b) Such paints, taken in a general sense. -- Oil cup, a cup, or small receptacle, connected with a bearing as a lubricator, and usually provided with a wick, wire, or adjustable valve for regulating the delivery of oil. -- Oil engine, a gas engine worked with the explosive vapor of petroleum. -- Oil gas, inflammable gas procured from oil, and used for lighting streets, houses, etc. -- Oil gland. (a) Zool. A gland which secretes oil; especially in birds, the large gland at the base of the tail. (b) Bot. A gland, in some plants, producing oil. -- Oil green, a pale yellowish green, like oil. -- Oil of brick, empyreumatic oil obtained by subjecting a brick soaked in oil to distillation at a high temperature, -- used by lapidaries as a vehicle for the emery by which stones and gems are sawn or cut. Brande & C. -- Oil of talc, a nostrum made of calcined talc, and famous in the 17th century as a cosmetic. [Obs.] B. Jonson. -- Oil of vitriolChem., strong sulphuric acid; -- so called from its oily consistency and from its forming the vitriols or sulphates. -- Oil of wine, -- Oil painting. (a) The art of painting in oil colors. (b) Any kind of painting of which the pigments are originally ground in oil. -- Oil palmBot., a palm tree whose fruit furnishes oil, esp. Elaeis Guineensis. See Elaeis. -- Oil sardineZool., an East Indian herring (Clupea scombrina), valued for its oil. -- Oil sharkZool. (a) The liver shark. (b) The tope. -- Oil still, a still for hydrocarbons, esp. for petroleum. -- Oil test, a test for determining the temperature at which petroleum oils give off vapor which is liable to explode. -- Oil tree. Bot. (a) A plant of the genus Ricinus (R. communis), from the seeds of which castor oil is obtained. (b) An Indian tree, the mahwa. See Mahwa. (c) The oil palm. -- To burn the midnight oil, to study or work late at night. -- Volatle oils. See Essential oils, under Essential.